19/06/2017

Transportation of Goods under GST ( Author - HIMANSHU TIWARI )

Transportation has very important role in civilization of human beings and the development of a country. Transportation of goods has a vital part in development of a business. Availability of raw material, packing material and plant and machinery from different part of the world and making the finished goods available to the customer in different part of the world depends upon the transportation system. Goods become cheaper and expensive depending on the transportation cost. To keep this mind, government has given separate rates of transportation of goods and some of the transportation of goods are exempted from GST.

Goods are transported by using three means of transportation:-

1. By Air

2. By Water

3. By Road

  • Rail
  • GTA
  • Other modes

1. Transport of goods by Air

S. No.ParticularsWhether taxable or not under GST?Tax rate
1.Within IndiaYes18%
2.From India to outside IndiaYes18%
3.From outside India to IndiaExempt  ServiceExempt Service

2. Transport of goods by water

S. No.ParticularsWhether taxable or not under GST?Tax rate
1.Within India (inland waterways).Exempt  ServiceExempt Service
2.From India to outside India.Yes18%
3.From outside India to IndiaExempt service.

Conditions:-

1.     Service provided by a person located in non taxable territory.

2.     Services provided to a person located outside the taxable territory.

3.     Transportation of goods is done in a vessel.

Exempt service.

Conditions:-

1.     Service provided by a person located in non taxable  territory.

2.     Services provided to a person located outside the taxable territory.

3.     Transportation of goods is done in a vessel.

3. Transport of goods by Road

S. No.ParticularsWhether taxable or not under GST?Tax rate
1.By rail other than container.Taxable5% with ITC on input service.
2.By rail in containerYes12% with ITC on input service.
3.By Goods Transport AgencyYes5% with NO ITC.
4.Services of goods by courier agencyYes18% with ITC credit.
5.Other than Rail, GTA and courier agency.Exempt ServiceExempt Service

What is Goods Transport Agency:- means any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.

Exceptions:-

Services by way of transportation by rail or  a vessel  from one  place  in India to another  of  the following  goods –

  • relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
  • defence or military  equipments;
  • newspaper or magazines registered with the Registrar of  Newspapers;
  • railway equipments or materials;
  • agricultural produce;
  • milk, salt and food grain including flours, pulses and rice;  and
  • organic manure.

Services provided by a goods transport agency, by way of transport in a goods carriage of,-

  • agricultural produce;
  • goods, where gross amount charged for the transportation of goods on a consignment transported in a single carriage does not exceed one thousand five hundred rupees;
  • goods, where gross amount charged for transportation of all such goods for a single consignee does not exceed rupees seven hundred fifty;
  • milk, salt and food grain including flour, pulses and rice;
  • organic manure;
  • newspaper or magazines registered with the Registrar of  Newspapers;
  • relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap; or
  • defence or military equipment’s;

Reverse Charge in case of GTA:- Normally a service provider is required to pay taxes, but in case GTA provides the services to the following persons, recipient of services is required to pay GST under reverse charge:-

  1. any factory registered under or governed by the Factories Act,1948;
  2. any society registered under the Societies Registration Act, 1860 or under any other law for the time being in force in any part of India;
  3. any co-operative society established by or under any law;
  4. any person registered under CGST/SGST/UTGST Act;
  5. any body corporate established by or under any law; or
  6. any partnership firm whether registered or not under any law including association of persons;
  7. casual taxable person.


About the author

HIMANSHU TIWARI

CHARTERED ACCOUNTANT
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